Question 1

Suppose the money wage rate and the price level both fall by 5 percent. As a result,

Accepted Answer

A)  the quantity of labor demanded increases. 
B)  people are worse off and there is more unemployment. 
C)  the quantity of labor demanded does not change because there is no change in the real wage. 
D)  the quantity of labor demanded decreases. 
A)  the quantity of labor demanded increases. 
B)  people are worse off and there is more unemployment. 
C)  the quantity of labor demanded does not change because there is no change in the real wage. 
D)  the quantity of labor demanded decreases.

Question 2

The demand for labor curve

Accepted Answer

A)  is upward sloping and the supply curve of labor is downward sloping. 
B)  shifts rightward when the real wage rate rises. 
C)  is downward sloping because productivity of labor diminishes as more workers are employed. 
D)  is upward sloping because productivity of labor diminishes as more workers are employed. 
A)  is upward sloping and the supply curve of labor is downward sloping. 
B)  shifts rightward when the real wage rate rises. 
C)  is downward sloping because productivity of labor diminishes as more workers are employed. 
D)  is upward sloping because productivity of labor diminishes as more workers are employed.

Question 3

Last year, capital per hour of labor grew 6 percent. Increases in technology and human capital brought about a 3 percent increase in labor productivity. Using the one- third rule, what was the total increase in labor productivity last year?

Accepted Answer

The one- third rule indicates that the i

Question 4

If both the supply of labor and the demand for labor increase, then

Accepted Answer

A)  potential GDP decreases. 
B)  the real wage rate increases. 
C)  full employment decreases. 
D)  potential GDP increases. 
A)  potential GDP decreases. 
B)  the real wage rate increases. 
C)  full employment decreases. 
D)  potential GDP increases.

Question 5

Labor productivity rises

Accepted Answer

A)  if firms invest in hiring more workers rather than buying more capital. 
B)  if the amount of capital per worker decreases. 
C)  if the amount of capital per worker increases. 
D)  in the absence of technological progress. 
A)  if firms invest in hiring more workers rather than buying more capital. 
B)  if the amount of capital per worker decreases. 
C)  if the amount of capital per worker increases. 
D)  in the absence of technological progress.

Question 6

-The table above shows capital per hour of labor and labor productivity for the beach economy of Whitepool. In the year 2009, what is the contribution of the increase in capital per hour of labor and the contribution of technological change to the growth in real GDP per hour of labor?

Accepted Answer

A)  0 percent; 10 percent 
B)  3 1/3 percent; 6 2/3 percent 
C)  5 percent; 5 percent 
D)  10 percent; 0 percent 
A)  0 percent; 10 percent 
B)  3 1/3 percent; 6 2/3 percent 
C)  5 percent; 5 percent 
D)  10 percent; 0 percent

Question 7

Labor productivity is defined as

Accepted Answer

A)  total output attributable to labor. 
B)  the growth rate of the labor force. 
C)  real GDP per hour of labor. 
D)  total real GDP. 
A)  total output attributable to labor. 
B)  the growth rate of the labor force. 
C)  real GDP per hour of labor. 
D)  total real GDP.

Question 8

The supply of labor curve

Accepted Answer

A)  is usually vertical. 
B)  has a negative slope. 
C)  is independent of the wage rate. 
D)  shows how much labor workers are willing to supply at various real wage rates. 
A)  is usually vertical. 
B)  has a negative slope. 
C)  is independent of the wage rate. 
D)  shows how much labor workers are willing to supply at various real wage rates.

Question 9

A key feature of the new growth theory is the assumption of

Accepted Answer

A)  diminishing returns to labor. 
B)  no diminishing returns to knowledge. 
C)  no diminishing returns to labor. 
D)  diminishing returns to knowledge. 
A)  diminishing returns to labor. 
B)  no diminishing returns to knowledge. 
C)  no diminishing returns to labor. 
D)  diminishing returns to knowledge.

Question 10

Employment and (total) potential GDP increase if the

Accepted Answer

A)  labor demand curve shifts leftward and the labor supply curve does not shift. 
B)  labor supply curve shifts rightward and the labor demand curve does not shift. 
C)  labor demand curve shifts leftward more than the labor supply curve shifts rightward. 
D)  None of the above answers are correct. 
A)  labor demand curve shifts leftward and the labor supply curve does not shift. 
B)  labor supply curve shifts rightward and the labor demand curve does not shift. 
C)  labor demand curve shifts leftward more than the labor supply curve shifts rightward. 
D)  None of the above answers are correct.

Question 11

According to the neoclassical growth theory,

Accepted Answer

A)  higher saving rates generate permanently faster growth in GDP per person. 
B)  forces other than GDP growth determine population growth. 
C)  increases in labor productivity are only temporary. 
D)  technological change depends on people's choices. 
A)  higher saving rates generate permanently faster growth in GDP per person. 
B)  forces other than GDP growth determine population growth. 
C)  increases in labor productivity are only temporary. 
D)  technological change depends on people's choices.

Question 12

Suppose that capital per hour of labor increases by 18 percent while real GDP per hour of labor increases by 10 percent. What is the contribution to the increase in real GDP per hour of labor from changing technology?

Accepted Answer

A)  It increased real GDP per hour of labor by 3.33 percent. 
B)  It increased real GDP per hour of labor by 4 percent. 
C)  It increased real GDP per hour of labor by 12 percent. 
D)  It increased real GDP per hour of labor by 18 percent. 
A)  It increased real GDP per hour of labor by 3.33 percent. 
B)  It increased real GDP per hour of labor by 4 percent. 
C)  It increased real GDP per hour of labor by 12 percent. 
D)  It increased real GDP per hour of labor by 18 percent.

Question 13

If capital per hour of labor decreases, real GDP per hour of labor

Accepted Answer

A)  decreases because the level of technology decreases. 
B)  increases for a given level of technology. 
C)  decreases for a given level of technology. 
D)  increases because the level of technology increases. 
A)  decreases because the level of technology decreases. 
B)  increases for a given level of technology. 
C)  decreases for a given level of technology. 
D)  increases because the level of technology increases.

Question 14

provides a way for economists to calculate the impact of different determinants of economic growth.

Accepted Answer

A)  Growth accounting 
B)  Labor productivity 
C)  Nominal GDP 
D)  Growth theory 
A)  Growth accounting 
B)  Labor productivity 
C)  Nominal GDP 
D)  Growth theory

Question 15

If capital per hour of labor grows by 3 percent a year and labor productivity grows by 2.5 percent a year, the one third rule says that the growth in labor productivity can be divided so that capital growth accounted for percentage points and technological change accounted for percentage points.

Accepted Answer

A)  2.5; 2.5 
B)  3.0; - 0.5 
C)  1.0; 1.5 
D)  1.0; 1.0 
A)  2.5; 2.5 
B)  3.0; - 0.5 
C)  1.0; 1.5 
D)  1.0; 1.0

Question 16

When did productivity grow most rapidly?

Accepted Answer

A)  1960 to 1973 
B)  1983 to 1997 
C)  1960 to 1983 
D)  1973 to 1983 
A)  1960 to 1973 
B)  1983 to 1997 
C)  1960 to 1983 
D)  1973 to 1983

Question 17

An advance in technology that increases productivity and an increase in the working- age population results in a

Accepted Answer

A)  rightward shift of the labor supply curve. 
B)  rightward shift of the labor demand curve. 
C)  movement along the production function. 
D)  rightward shift of the labor supply curve and of the labor demand curve. 
A)  rightward shift of the labor supply curve. 
B)  rightward shift of the labor demand curve. 
C)  movement along the production function. 
D)  rightward shift of the labor supply curve and of the labor demand curve.

Question 18

An assumption of the neoclassical theory of growth is that

Accepted Answer

A)  knowledge has diminishing returns. 
B)  all technological advances are the result of chance. 
C)  people earn only a subsistence real wage rate. 
D)  the marginal product of all types of capital increases as more capital is accumulated. 
A)  knowledge has diminishing returns. 
B)  all technological advances are the result of chance. 
C)  people earn only a subsistence real wage rate. 
D)  the marginal product of all types of capital increases as more capital is accumulated.

Question 19

Real GDP per person in the country of Flip is $10,000, and the growth rate is 10 percent a year. Real GDP per person in the country of Flap is $20,000 and the growth rate is 5 percent a year. When will real GDP per person be greater in Flip than in Flap?

Accepted Answer

A)  in 15 years 
B)  in 2 years 
C)  in 10 years 
D)  never 
A)  in 15 years 
B)  in 2 years 
C)  in 10 years 
D)  never

Question 20

Classical growth theory asserts that

Accepted Answer

A)  only some countries can have economic growth. 
B)  growth in real GDP per person is temporary. 
C)  real GDP growth will eventually be a constant 3 percent per year. 
D)  nominal GDP growth is most important. 
A)  only some countries can have economic growth. 
B)  growth in real GDP per person is temporary. 
C)  real GDP growth will eventually be a constant 3 percent per year. 
D)  nominal GDP growth is most important.

Suppose the money wage rate and the price level both fall by 5 percent. As a result,

The demand for labor curve

Last year, capital per hour of labor grew 6 percent. Increases in technology and human capital brought about a 3 percent increase in labor productivity. Using the one- third rule, what was the total increase in labor productivity last year?

If both the supply of labor and the demand for labor increase, then

Labor productivity rises

-The table above shows capital per hour of labor and labor productivity for the beach economy of Whitepool. In the year 2009, what is the contribution of the increase in capital per hour of labor and the contribution of technological change to the growth in real GDP per hour of labor?

Labor productivity is defined as

The supply of labor curve

A key feature of the new growth theory is the assumption of

Employment and (total) potential GDP increase if the

According to the neoclassical growth theory,

Suppose that capital per hour of labor increases by 18 percent while real GDP per hour of labor increases by 10 percent. What is the contribution to the increase in real GDP per hour of labor from changing technology?

If capital per hour of labor decreases, real GDP per hour of labor

provides a way for economists to calculate the impact of different determinants of economic growth.

If capital per hour of labor grows by 3 percent a year and labor productivity grows by 2.5 percent a year, the one third rule says that the growth in labor productivity can be divided so that capital growth accounted for percentage points and technological change accounted for percentage points.

When did productivity grow most rapidly?

An advance in technology that increases productivity and an increase in the working- age population results in a

An assumption of the neoclassical theory of growth is that

Real GDP per person in the country of Flip is $10,000, and the growth rate is 10 percent a year. Real GDP per person in the country of Flap is $20,000 and the growth rate is 5 percent a year. When will real GDP per person be greater in Flip than in Flap?

Classical growth theory asserts that

What Is Economics

The Economic Problem

Demand and Supply

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: They Keynesian Model

U.S. Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Exam 6: Economic Growth

Suppose the money wage rate and the price level both fall by 5 percent. As a result,

The demand for labor curve

Last year, capital per hour of labor grew 6 percent. Increases in technology and human capital brought about a 3 percent increase in labor productivity. Using the one- third rule, what was the total increase in labor productivity last year?

If both the supply of labor and the demand for labor increase, then

Labor productivity rises

-The table above shows capital per hour of labor and labor productivity for the beach economy of Whitepool. In the year 2009, what is the contribution of the increase in capital per hour of labor and the contribution of technological change to the growth in real GDP per hour of labor?

Labor productivity is defined as

The supply of labor curve

A key feature of the new growth theory is the assumption of

Employment and (total) potential GDP increase if the

According to the neoclassical growth theory,

Suppose that capital per hour of labor increases by 18 percent while real GDP per hour of labor increases by 10 percent. What is the contribution to the increase in real GDP per hour of labor from changing technology?

If capital per hour of labor decreases, real GDP per hour of labor

provides a way for economists to calculate the impact of different determinants of economic growth.

If capital per hour of labor grows by 3 percent a year and labor productivity grows by 2.5 percent a year, the one third rule says that the growth in labor productivity can be divided so that capital growth accounted for percentage points and technological change accounted for percentage points.

When did productivity grow most rapidly?

An advance in technology that increases productivity and an increase in the working- age population results in a

An assumption of the neoclassical theory of growth is that

Real GDP per person in the country of Flip is $10,000, and the growth rate is 10 percent a year. Real GDP per person in the country of Flap is $20,000 and the growth rate is 5 percent a year. When will real GDP per person be greater in Flip than in Flap?

Classical growth theory asserts that

What Is Economics

The Economic Problem

Demand and Supply

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: They Keynesian Model

U.S. Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Filters